for leasing commercial vehicles leapt by 32% in the first quarter
of this year, compared with the year-earlier period, according to
the Finance & Leasing Association (FLA).
The FLA, the UK trade association
representing consumer credit, motor finance and asset finance
sectors, said the growth in demand for vehicle leasing was partly
due to small businesses switching to more environmentally-friendly
More than £1bn (€1.14bn) was
provided by finance companies for leasing or hire purchase of
around 20,000 new vans, trucks and lorries in the first quarter of
2011, the FLA figures also revealed.
One of the fastest-growing parts of
asset finance is the broker industry. Broker-arranged commercial
finance rose 19% in the last 12 months to £3bn – the highest annual
total since June 2009, the FLA said.
There was also growth in finance
provided for business equipment, plant and machinery and IT
equipment. Total asset finance increased by 8% over the
Finance arranged by equipment
dealers and distributors rose by 24% in the first quarter of 2011
FLA head of asset finance Julian
Rose: “Many of the small businesses that provide the services that
keep our homes and offices going are replacing their old vehicles
with more suitable and more environmentally-friendly models.
“Our evidence shows that small
businesses like plumbers, builders and delivery companies are
turning to asset finance rather than paying upfront.
“More and more businesses are
making use of the wide choice of available asset finance. Finance
direct from a bank or finance house is still the most popular, but
finance from an equipment dealer or distributor, or through a
commercial finance broker, is increasing in popularity.”
• UK asset finance brokers are
confident about their prospects over the next quarter, according to
the latest confidence survey from the FLA. Most are expecting
A total of 78% of respondents
expect broker-introduced asset finance to grow over the next three
months, while 75% expect equipment dealer and distributor finance
will do the same.
Forty-two% expect SME use of asset
finance to grow over the next quarter, while 58% think it will
On the other hand, just 21% of
respondents believe asset finance market conditions will improve
over the next three months, while 76% think they will remain
unchanged. The remaining 3% expect conditions to deteriorate.
The quarterly survey asked senior
industry executives for their opinions on the prospects for both
the UK economy and the asset finance industry.
FLA head of research and chief
economist Geraldine Kilkelly said: “We are already seeing a
recovery in SME investment via asset finance, including for
commercial vehicles, IT and other business equipment.
“The survey shows many of our members expect to see growth over
the next quarter.”